baexecutive From United Kingdom, joined Jul 2005, 652 posts, RR: 0 Posted (2 years 11 months 3 weeks 3 days ago) and read 1190 times:
A second agency has downgraded Spain's credit rating, citing the countries poor growth prospects. Fitch joins Standard & Poor's in the downgrade to AA+.
This adds to the countries regional banking problem with 6 savings banks seeking alliances to avoid insolvency following on from Cajasur being taken over by Spanish authorities earlier this month.
With an unemployment rate of currently 20% (twice the eurozone average) it isn't looking too good for Spain.
Klaus From Germany, joined Jul 2001, 20845 posts, RR: 55 Reply 2, posted (2 years 11 months 3 weeks 2 days 23 hours ago) and read 1157 times:
If the rating agencies hadn't demonstrated their complete and utter incompetence as a major contributing cause of the financial crisis, this could be called a plausible step.
As things stand, among many other things to be cleaned up, the current rating agencies need to be totally revamped or completely replaced outright. They are in much, much worse shape themselves than either Spain or even Greece.
DocLightning From United States of America, joined Nov 2005, 16807 posts, RR: 57 Reply 3, posted (2 years 11 months 3 weeks 2 days 8 hours ago) and read 970 times:
This is an interesting test for the Euro. Spain is the 4th largest economy and, until recently, was the fastest growing in Europe.
In most countries, an event like this would drive the value of the currency up a bit. Nobody has any money to spend, so everything gets cheaper. With the Euro, that effect is much smaller. But while the Euro holds steady, other things in Spain get very cheap, like labor and land. A building boom in the costal towns could be the correcting factor, but that alone isn't going to employ 15% of Spaniards so as to get unemployment down to a reasonable level again.
Klaus From Germany, joined Jul 2001, 20845 posts, RR: 55 Reply 4, posted (2 years 11 months 3 weeks 2 days 8 hours ago) and read 966 times:
Quoting DocLightning (Reply 4): In most countries, an event like this would drive the value of the currency up a bit. Nobody has any money to spend, so everything gets cheaper.
How would that produce any upwards momentum? I see only downwards pressure there.
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